This One Decision By Abercrombie & Fitch Could Save Hollister

Published 1:11 pm, Friday, March 7, 2014

Abercrombie & Fitch is planning to transform its struggling Hollister brand into a fast fashion retailer to compete with the likes of Zara, H&M and Forever21.

The transformation will mean lower prices and more styles for Hollister shoppers.

The company is planning to make the transition by beefing up its U.S.-based supply vendors and finding a new president with fast fashion experience, the Wall Street Journal reports.

Fast fashion retailers get their name for rapidly turning runway styles into ready-to-wear fashions at cheap prices. Most fast fashion outlets also tend to produce a limited quantity of each style, but with a much larger selection than traditional retailers.

The move by Abercrombie comes as teens are increasingly turning away from traditional retailers in favor of fast fashion.

Abercrombie's same-store sales fell 10% in the fiscal year ending Feb. 1, while Hollister's plunged 14%. Hollister accounts for about half of the company's sales.

The company's poor performance has led activist investor Engaged Capital LLC to press for the resignation of CEO Mike Jeffries.